5.8 Improving Transparency and Investor Access to the Municipal Market

Individual investors are among the largest holders of municipal bonds, either through direct ownership or indirectly, through mutual funds, money market funds, and other investment vehicles. Compared to the market for equities, the municipal debt market is relatively illiquid and less transparent with respect to pricing, which in theory, may discourage investors (particularly retail investors) from participating in an offering and lead to higher cost of funds for issuers. Consequently, public agency issuers should have an interest in promoting technological resources that broaden retail investor participation in a debt issuance and minimize basic transactional barriers to investing. These activities may include investor relations and outreach websites and adoption of internet and other technology based platforms that afford investors greater access to debt offerings and provide transparency on the pricing of municipal securities.